4 key concepts for setting intelligent sales quotas
If you’re like most sales leaders, you spend a lot of time thinking about quotas and how hard they are to get right. At the very least, you set sales goals and hope that the sales team meets them. But we all know that’s not really enough. To truly empower your team to sell, you need incentives that spur excitement, territories that make sense, and quotas that are tough but attainable.
Recently, The Sales Evangelist invited Jason Loh, Global Head of Sales Solutions at Anaplan onto his podcast to talk about these issues. As they discussed, planning for sales quotas can put sales leaders, and by extension their sales team, in a real time bind.
This time bind, Jason pointed out, comes from the fact that sales leaders often have to squander their time chasing numbers. To plan future sales quotas, sales leaders need to know what’s happened in the past. Setting good quotas for Q1, for example, requires processing the numbers from Q4 and earlier: not only reps’ individual numbers, but also how those correlate their historical achievements, how each rep performed relative to their quotes, and so on.
If processing these numbers takes months (as it often does), you can’t roll out your new incentives until well into Q1. But this means that salespeople lose months of potential sales in Q1, because they don’t yet have their quotas, and don’t know what products or customers they should be focusing on.
Calculating actionable quotas is only possible with data. Creating aggressive quotas that are also fair and attainable isn’t really possible if you don’t have all of the information you need. You need to know, for example, how much product is available for sale and how much needs to be sold. You need to know how many sales reps you have available, what their territories are, what their talents are, and what motivates each of them.
This isn’t all. To produce quality quotas, you also need to be able to trust that your data is accurate. To do that, you need to control the versions of reports and maintain transparency throughout the organization.
Setting smart sales quotas
To set smart sales quotas, keep these four concepts in mind.
1) Understand the value of time
You might remember going to the library and checking out books when you had a big research project to do. (Or you may have heard your parents talking about doing this!) Nowadays, you go to your phone or the nearest computer. It’s fast and immediate. Shouldn’t the research you do to make your business plans be just as quick?
Unless the main focus of your job is consolidating sales data, it’s more productive to spend your time making a plan, implementing it, and then getting to other important tasks. For that to happen, you need the right technology.
2) Use technology to monitor and measure the results
We use technology to find out how to get to the customer’s office or whether that widget is available rather than clinging to old-fashioned methods. Similarly, it makes sense to use up-to-date technology to help with sales quotas.
For example, you’re probably using CRM technology that monitors data for leaders and sales teams, keeping track of leads, calendars events, meetings, and deadlines. But this kind of technology doesn’t collect the information you need to design good quotas. Nor can it consolidate, reorganize, and track data in the forms you need.
Instead, you need technology that can collect and analyze sales data automatically, that can supply the data you need when you need it.
3) Look at the process holistically
It’s not enough to focus on the final numbers; your team can’t improve without a full spectrum of information. They need to know where their own sales efforts stand in context of the larger organization or corporate plan, and they need to know how the group as a whole is doing.
If your best sales rep has a bad quarter and your worst rep has a great one, for example, you should be curious about what happened. It’s not always about the raw numbers: Did territories change? Did your product change? Were customers having their own disruptions?
You need a system that lets you see into the shady dark corners of your sales data as well as the activities in the spotlight. You need to be able to assess the skills of each sales rep, the potential of your territories, and the quirks of the market itself. In order to keep track of all that, including sales history, you need a tool that will help set intelligent goals and achieve the desired results.
4) Identify ways to get—and keep—the team on track.
Your sales quota plans should be relevant to the company’s goals. This concept sounds obvious, but according to research from the Alexander Group, fewer than 20 percent of companies have compensation plans that properly promote the sales team’s goals.
These problems can be exacerbated if you’re still using old-fashioned spreadsheets, which tend to create information silos. To set quotas, all of your data needs to be aggregated in a single place. If you’re using spreadsheets, you’re going to spend too much time gathering and assessing it.
Set your team up for high productivity
To create quotas that work, you need to spend your time analyzing the data, rather than doing the grunt work of collecting and aggregating it.
In Anaplan’s Connected Planning platform, sales people enter data as it happens. This means that you can see what’s going on throughout your sales team in real time. You can also analyze data in advance, testing possible changes to quotas, territories, account segments, and so on, to see what might happen.
When making quotas, there’s no need to set quotas and just hope for the best. Instead, you can work proactively, using the right technology to create an intelligent plan that’s developed on time and conveyed to all relevant parties. Your plan springs into action in real time and gives salespeople more time to sell.
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Topic: Sales Management